Diagnostics stocks surge on Covid scare; Dr. Lal PathLabs, Vijaya Diagnostic rise up to 8%

Shares of diagnostics stocks hogged the limelight once again on Dalal Street amid reports of a sudden spurt in Covid-19 cases in China, Japan, the United States of America, the Republic of Korea, and Brazil. Reacting to the news, shares of Dr. Lal PathLabs, Metropolis Healthcare, Vijaya Diagnostic Centre, Thyrocare Technologies, and Krsnaa Diagnostics rallied up to 6% in early trade on Wednesday as investors are betting high on these stocks amid brighter prospects for diagnostics and healthcare businesses amid Covid scare.

Among diagnostics companies, Vijaya Diagnostic Centre topped the chart by rising as much as 8.4% to hit a high of ₹461.95 on the BSE. It was followed by Dr. Lal PathLabs, which jumped 6.4% to ₹2,434.70, while Metropolis Healthcare share price gained 4.4% to ₹1,338. The share price of Thyrocare Technologies also soared 3.3% to ₹630 on the BSE.

The hospital stocks were also trading higher, with Max and Apollo rising up to 1% on the BSE. In comparison, the BSE Sensex was trading 114 points lower at 61,588 levels at the time of reporting.

Diagnostics and healthcare stocks have lost some momentum in the last one year as demand normalises following Covid-related dislocations. Shares of Dr. Lal PathLabs have fallen over 29% in a year, while stock prices of Metropolis Healthcare and Vijaya Diagnostic Centre tumbled 60% and 18%, respectively, during the same period. Thyrocare Technologies shares also dropped 35% in the last one year. In contrast, the BSE benchmark Sensex has risen over 9% during the period under review.

Amid rising global coronavirus cases, the central government has asked all states and Union Territories (UTs) to step up vigil against Covid-19 cases and ensure that samples of all positive cases, on a daily basis, are sent to the designated Genome Sequencing Laboratories (lGSLs) that are part of the Indian SARS-CoV-2 Genomics Consortium (INSACoG) network spread across the country.

In a letter to the States and UTs, Union health secretary Rajesh Bhushan said it is essential to gear up the whole genome sequencing of positive case samples to track the variants through the INSACoG network. While around 35 lakh Covid-19 positive cases are reported around the world daily, India only has around 1,200 cases on a weekly basis. The health secretary said India has been able to restrict the transmission of the Covid-19 virus through its five-fold strategy of test-track-treat-vaccination and adherence to Covid-appropriate behaviour.